The nation’s housing meltdown became a nightmare for the millions of Americans who lost their homes to foreclosure.

But that same downturn has been a bonanza for institutional investors. Backed by venture capitalists, they swooped in and scooped up scores of bank-owned properties at bargain-basement prices.

Most of the homes were dressed up at minimal cost and then rented out in hopes of selling them when the market improved.

And therein lies the problem.

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Renters typically don’t care as much about the appearance and upkeep of the properties as buyers who purchase homes to live in them. And many of the investors are absentee landlords who generally feel the same way. It’s become a problem across the Southland, according to Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora.

“You have a lot of slumlords who will put as little money as possible into the homes to maximize their return.” she said. “And it has an effect on the neighborhood if you have people who are not taking care of the landscaping and the outside of the homes.”

The Los Olivos condo community in La Mirada doesn’t have a lot of rental properties. But the ones that are rentals sometimes create problems that go beyond shoddy curb appeal, according to Jack Slagle, a site manager with the neighborhood homeowners association.

“The owners of these units are not speculators,” he said. “But a lot of times you have subsidized rental programs for individuals who are not the usual level of people who could afford to buy or rent in here. The greatest problems come from the level of noise and disturbing the peace … things like that.”

At the peak of the downturn, foreclosures accounted most of the transactions Rodriguez’s office handled. But most of those properties have since been sold and housing prices have gained considerable traction. Now foreclosures make up just 10 to 15 percent of the mix, she said.

Nancy Villasenor, a broker associate with Remax in Valencia, has seen an even sharper decline in bank-owned properties.

“At the height of the housing problem about 95 percent of our transactions involved foreclosures,” she said. “Now it’s about 5 percent.”

Villasenor said foreclosures have crept up slightly in recent weeks. But she chalked that up to properties that fell out of long-term short-sale status into foreclosure and other homes that had been destined for foreclosure but were put on hold during the government shutdown.

“A lot of the (bank-owned) properties went to real estate investment trusts, and those are the ones that you are seeing as rentals,” she said. “There’s a foreclosure on Redwood Canyon Place in Saugus that investors purchased and just left sitting there. They haven’t done anything to it.”

The home appears to be in fairly good shape, although the landscaping has turned brown and weeds are taking hold.

Industry tracker DataQuick reported recently that the number of California homeowners entering the foreclosure process fell last quarter to the second-lowest level in seven and a half years. They attributed the drop-off to a stronger job market, home price appreciation and a variety of government programs that are designed to help homeowners avoid foreclosure.

Lenders filed 20,314 notices of default in the state during the July-through-September period. That was down 21.1 percent from 25,747 during the previous quarter and down 58.6 percent from 49,026 in third-quarter 2012, according to DataQuick.

“Cleanup of the foreclosure mess is ongoing, but it’s difficult to imagine a huge new wave,” DataQuick President John Walsh said in a statement.

Walsh said he still gets asked about the long-feared “shadow inventory” of distressed properties that some predicted would trigger another surge in foreclosures. But those warnings, he said, didn’t account for the breadth and depth of the government’s eventual intervention in the crisis.

A 2014 market forecast from the California Association of Realtors also reveals a significant downturn in the number of foreclosures.

“We’ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking from one in three sales a year ago to less than one in five in recent months, thanks primarily to sharp gains in home prices,” CAR Vice President and Chief Economist Leslie Appleton-Young said in a statement. “As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014.”

As a result of those factors, the double-digit price increases that Southern California homes have seen for much of this year will segue to mid-single digit increases in most of the state, she said.

The Southland’s housing market has seen significant price appreciation over the past year. A recent DataQuick report shows that Los Angeles County’s median home price rose 25 percent in September compared with a year ago. That brought the region’s median price to $425,000.

San Bernardino County saw an ever bigger annual price gain of 32.4 percent, which bumped its median price up to $225,000.

That’s good news for homeowners. But there are still lots of rental properties out there. And investors are lined up to buy them.

“Some of the banks will vacate the properties and then put them on the market, but most of them are just selling them on auction.com,” said Carlos Sandoval, a Realtor with Sierra Realty in Fontana. “Everything is just moving so quickly. I’ll put a property on the market and within 24 hours I’ll get calls from seven to 10 investors. Some are corporations that keep them to rent out and others are fixed up and sold to buyers — some from other countries.”

Rodriguez said many of the area’s remaining investor-owned properties are in San Bernardino and Riverside counties.

“If you look at the Inland Empire they have more investor-owned properties because prices were lower there,” she said. “I have a friend who bought about 15 properties in the Corona area and they have appreciated at least 33 percent. I bought a condo in Azusa for $209,000 about a year ago. Now it’s worth $350,000.”

Rodriguez was quick to note that she and her friend have a hands-on approach to renting out their investment properties.

“I’m a great landlady — my tenants love me,” she said. “We take care of our properties inside and out. But we’re few and far between.”

Steve Johnson, director of the Southern California region for Metrostudy, a real estate information and consulting firm, said 50 to 55 percent of homes on the market in the Inland Empire are distressed properties, many of which are owned by investors.

“They are dispersed far and wide,” he said. “There may be some subdivisions that sold out at the peak of the (housing crash) that now have more rentals. There could be pockets of them, but I’m not aware of where they are.”